Facebook prepares for $5B privacy fine

Facebook has set aside $3 billion to $5 billion to pay for its expected Federal Trade Commission privacy violation fine, the company confirmed when releasing its first quarter financial results April 24, The New York Times reports.

Facebook anticipates paying a one-time charge in connection with an "ongoing inquiry" by the FTC, the company disclosed in its quarterly financial results. Facebook also said that "the matter remains unresolved, and there can be no assurance to the timing or the terms of any final outcome," the NYT reports.

The $5 billion penalty would be among the FTC's largest fines against a technology company. Facebook has been in negotiations with the agency for months to resolve allegations that the social media giant violated a 2011 privacy consent decree. Facebook has since announced a series of measures it plans to implement to secure user privacy.

In 2018, the FTC opened another investigation into Facebook for allegedly not protecting user data, reports the NYT. Facebook is accused of not protecting user data as it was being collected by Cambridge Analytica, a British political consulting firm. The company also reported a data breach that affected 50 million users' personal information.

The $5 billion fine, however, is not expected to hurt Facebook's financials, as the company reported $56 billion in annual revenue in 2018. For the first quarter, Facebook's revenue increased 26 percent year over year to $15 billion. The company has more than $40 billion in cash reserve.

More articles on cybersecurity:
Washington State University settles $5.26M data breach class-action suit
HHS continues to deploy strong cybersecurity solutions, report finds
Rehab center data breach exposes millions of patient records

© Copyright ASC COMMUNICATIONS 2019. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months